Australian Wheat Board Limited v Powell

[2004] WADC 3

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   AUSTRALIAN WHEAT BOARD LIMITED -v- POWELL [2004] WADC 3

CORAM:   REGISTRAR KINGSLEY

HEARD:   13 NOVEMBER 2003

DELIVERED          :   22 JANUARY 2004

FILE NO/S:   CIV 1184 of 2003

BETWEEN:   AUSTRALIAN WHEAT BOARD LIMITED

Plaintiff

AND

WILLIAM KENNETH POWELL
Defendant

Catchwords:

Practice - Application to set aside judgment - Turns on own facts

Legislation:

Nil

Result:

Application allowed in part

Representation:

Counsel:

Plaintiff:     Ms L D Chighine

Defendant:     Ms K J Everett

Solicitors:

Plaintiff:     Jackson McDonald

Defendant:     WL & KJ Everett

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Collins Book Depot Pty Ltd v Bretherton [1938] VLR 40

Palmer v Prince [1980] WAR 16

Parker v Tansfield Pty Ltd [2000] WASCA 382

Re J L Young Manufacturing Co Ltd [1900] 2 Ch 753

1. REGISTRAR KINGSLEY:  This is the defendant's application seeking to set aside judgment in default of defence.  The writ was filed in May 2003 and an appearance entered in June 2003.  Without any further reference to the defendant, the plaintiff entered judgment on 14 July 2003.

2. In explanation for the entry of judgment, the defendant's solicitor candidly deposes that she assumed, wrongly, that the writ had been endorsed.  She was waiting to receive a statement of claim.  It was not until 18 August 2003 that the defendant's solicitor was notified by letter that judgment had been entered.  Ms Everett then immediately brought an application to set aside judgment.

3. Two affidavits in support of the application have been filed - that of the defendant's solicitor sworn 27 August 2003 and that of the defendant sworn 7 October 2003.  After argument, par 9 to par 19 inclusive of the defendant's solicitor's affidavit were struck out.  Paragraphs 10 to 19 inclusive of the defendant's solicitor's affidavit are incorporated by specific reference into the affidavit of Powell.

4. The issue relates to two written contracts to supply grain by the defendant to the plaintiff.  The first agreement (Contract R5116), the plaintiff pleads, was made in April 2000, and provided the defendant was to supply 1,035 tonnes of wheat grain to the plaintiff.  The plaintiff pleads that a term of the agreement was that if the defendant failed to deliver the wheat grain, the defendant would incur a washout payment.  That payment would be the difference between the contract price and the market value, plus costs, at the time of the washout.  A washout, as I understand it, is where the plaintiff is obliged to go out into the market to purchase wheat grain to fulfil its contractual obligations.  This occurs when growers do not deliver wheat grain to the plaintiff.  By invoice 611658 the plaintiff requested payment of $55,262 being:

   1,035 tonnes @ washout price $48.75 per tonne     $50,238.90

   GST  $  5,023.89

   TOTAL  $55,262.79

5. The second agreement arises in October 2000 when the defendant agreed to supply 1,000 tonnes of wheat grain - contract H2745.  Again the second agreement contains a washout payment.  The defendant did not deliver the plaintiff with 1,000 tonnes of wheat grain and by invoice 611659 the plaintiff claimed $46,002 being:

   1,000 tonnes @ washout price $41.82 per tonne     $41,820

   GST  $  4,182

   TOTAL  $46,002

6. There has been no issue as to whether the judgment has been regularly entered or not.  The issue for determination is whether there is merit in the facts put forward to warrant setting aside judgment.

7. At par 10 and par 11 of the defendant's solicitor's affidavit the defendant says there were two written contracts, R3639 and H2745.  The defendant deposes he did not enter into contract R5116 as pleaded in the statement of claim.

8. In an affidavit sworn on 23 October 2003 by Christopher James Tonkin, AWB regional manager, Tonkin deposes that the defendant entered into contract R3639 on 6 April 2000.  Contract R3639 exhibited to Everett's affidavit is dated 7 April 2000.  At par 11 of Tonkin's affidavit he deposes that the defendant only delivered 965 tonnes of the 2,000 tonnes contracted for under contract R3639 by November/December 2000.  As the wheat harvest overall was poor, due to a very dry year, the plaintiff gave a number of growers the option to roll over their contracts.  At par 16 Tonkin deposes he had conversations with the defendant during December 2000 and that the defendant was keen to take up the roll over option.  As a result, in or about 20 December 2000 Tonkin entered into contract R5116 which required the defendant to deliver grain in October/December 2001.

9. Tonkin exhibits contract R5116 to his affidavit.  The opening paragraph of the contract refers to a "discussion/telephone conversations made on 08/04/2000", not to telephone discussion as deposed by Tonkin as having occurred in December 2000.  Also, page 2 of the exhibited contract, which I must take to be the second page of contract R5116, whilst signed by the defendant, has the notation:

   "© AWB Limited 2001

   
   

   Revised 1^st Feb 2001"

10. This notation, in my opinion, puts in doubt, or at least raises an issue for argument that the contract Tonkin deposes was entered into in December 2000 is not R5116.  Certainly, contract R5116, on Tonkin's evidence, was not entered into on 6 April 2000, as pleaded but in December 2000.  Accordingly, I am of the opinion there is an issue for argument as to contract R 5116.

11. Contract H2745 was entered into between the parties in October 2000.  Delivery of grain was from 1 November 2001 to 31 December 2001.  The defendant failed to deliver the grain contracted for and incurred the washout payment.

12. The defendant Everett submits that there was a force majeure, in that funding for the wheat crop was not available to the defendant.  Contract H2745 was entered into in October 2001.  Everett's affidavit, at par 15, states that the defendant's bank, Elders Pty Ltd, refused finance in January 2001.  At par 17 of Everett's affidavit the defendant states that the letter from Elders Pty Ltd has a clear typographical error in that it is dated 2 February 2000.  The defendant states the letter was received in January 2001 and calls for a review on 31 January 2001 with various pieces of information to be provided by the defendant by 12 January 2001.

13. Clause 15 of contract H2745 contains the force majeure clause.  It is in terms that if a party cannot carry out its obligations by reason of strike, lockout, operation of Federal or State law, or for any other cause which in the opinion of AWB is reasonably beyond the parties' control, their performance of the obligations are suspended.  The defendant's counsel argues that, had AWB been in possession of the fact that the date on the Elders Pty Ltd letter was in error, then AWB would have exercised its discretion differently.

14. However, there is no enforceable obligation resting on AWB.  It is merely a discretion.  That being the case I am of the opinion there is no argument in relation to the force majeure clause.

15. The defendant argues that a financial penalty would be imposed in the event of non‑delivery of grain, at the discretion of the plaintiff.  The contract provides at cl 16 that a contract cancellation or default by the seller (defendant) will incur a washout payment.  The washout payment is the difference between the contract price and the market value plus costs at the time of the washout.

16. In my opinion there is no financial penalty arising.  The contractual term provides that if there is a default and AWB goes out into the market place to purchase wheat then the washout payment is the difference between the contract price and the market value, plus costs.

17. I am of the opinion that in contract H2745 no arguable issue arises.  For these reasons I would give leave to defend on contract R5116.  Judgment will not be set aside on contract H2745.  I will hear counsel as to the form of orders, and as to costs.